Canadians saving for their first home have another option—the First Home Savings Account—a registered plan that provides tax-free savings and withdrawals1 to buy or build your first home2. First-time homebuyers who are qualifying individuals3 can contribute up to $40,000 into an FHSA4.
- You must be 18 years or older5 to open an FHSA6.
- You must be a resident of Canada.
- You must be a first-time home buyer and have not lived in a qualifying home, either fully or jointly owned by you, or your spouse or common-law partner, as your principal place of residence within the year you open your FHSA or in the previous four calendar years.
Once you meet all conditions, you will be considered a qualifying individual.
lifetime contribution limit
annual contribution limit
an FHSA can remain open7
- Tax-deductible contributions, similar to an RRSP8.
- Tax-free savings and investment growth, like an RRSP and TFSA.
- Similar to a TFSA, withdrawals are tax-free but only if used to purchase a qualifying home.
- If you don’t contribute the maximum amount in one year, you can carry over your unused contribution room into the next year9.
Watch the video for an overview of FHSA benefits
- Only you can contribute to your FHSA. However, you can use your FHSA in combination with someone else’s to buy a qualifying home.
- You can use your FHSA and The Home Buyers' Plan10 from your RRSP towards the purchase of a qualifying first home.
- If you don’t buy a qualifying home before your maximum FHSA participation period ends, you can transfer your FHSA assets to your RRSP or your RRIF11 on a tax-deferred basis.
When do you want to purchase your first home? Consider this date, the annual amount you want to contribute, and how many years you plan to save for. Then work back to determine the date you should open your FHSA—remember you can only keep your FHSA open for 15 years.
Get your FHSA, TFSA and RRSP Home Buyers' Plan (HBP) working together to help you save for your first home.
Take advantage of the benefits all three programs have to offer:
Truly tax-free if you buy a qualifying home and you don’t have to pay it back, unlike an RRSP HBP.
It doesn’t reduce taxable income, but investment growth and withdrawals are tax-free.
For a tax-deferred HBP withdrawal.
You can take advantage of the benefits of three registered plans to build your home savings.
Amina and Sanjay—Maximizing FHSA contributions to help buy a home sooner
Dean—Using an FHSA to benefit from tax-free growth
Jessica—Transferring FHSA assets to an RRSP when homeownership doesn’t happen
You’ve worked hard to save for your first home and now the time has come! A qualifying withdrawal from your FHSA is tax-free. You can make a single withdrawal or a series of withdrawals, but all the following condition must be met:
- You must have a written agreement to buy or build a qualifying home12.
- You must not have acquired the qualifying home more than 30 days before making the withdrawal.
- Work with your advisor to complete the necessary forms (RC725 Request to Make a Qualifying Withdrawal from your FHSA).
If you make a withdrawal from your FHSA and all the conditions are not met, it will be treated as a taxable withdrawal.
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1 Must be a qualifying withdrawal.
2 Must be a qualifying home.
3 For further information concerning FHSAs, please go to https://www.canada.ca and search for “First Home Savings Account”.
4 Conditions apply.
5 19 years old if that is the legal age to enter a contract in your province or territory.
6 You must also be 71 years or younger as of December 31 of the year you open an FHSA.
7 Unlike an RRSP or TFSA, contribution room only starts to accumulate once an FHSA has been opened.
8 Contributions are tax deductible, except transfers in from your RRSP.
9 A maximum of $8,000 can be carried over in a year.
10 HBP withdrawals must be repaid within 15 years, however withdrawals made between January 1, 2022 and December 31, 2025 have the repayment period extended by three years. Your repayment period starts the second year after the year when you first made your first withdrawal from your RRSPs under the HBP.
11 Registered Retirement Income Fund (RRIF)
12 With the acquisition or construction completion date of the qualifying home before October 1 of the year following the date of the withdrawal.